France is experiencing an unprecedented decline in first-time homeownership – a crisis even deeper than during the 2009 and 2012 downturns. New research shows the main culprit is not rising interest rates or reduced public support, but stricter personal contribution requirements from the Banque de France, locking out tens of thousands of aspiring homeowners, especially among low-income households.
First-Time Homebuyers All but Shut Out
According to the latest data from the CSA Institute’s Housing Financing Observatory, the number of first-time homebuyers in France has dropped by 36.2% since 2019 – that’s 228,400 fewer households accessing homeownership opportunities. This fall explains more than 87% of the overall drop in homeownership, and has repercussions throughout the entire real estate sector, from new construction to the purchase of older homes.
While previous declines in property acquisition could be linked to economic slowdowns or fluctuating mortgage rates, today’s collapse is largely due to tougher down payment rules. The Banque de France’s policies have sharply raised the barrier for entry, making it nearly impossible for lower-income families to buy their first homes. In fact, between 2019 and 2024, households in this bracket were the hardest hit: their share among first-time buyers fell by almost 78,000.
A Market-Limiting Vicious Cycle
This historic contraction isn’t just affecting would-be homebuyers. It’s been responsible for 84% of the fall in new home construction and the share of existing-property transactions by individuals. The lack of new buyers destabilizes the entire market, slowing not only new builds but also stalling sales of existing homes. With property purchases stalling, residential mobility has suffered, making it harder for young adults to move out or families to upsize.
The damage goes beyond market statistics. For many modest-income households, owning a home is one of the last barriers against social and economic insecurity, especially in areas where rental supply is scarce and expensive. Today, as homeownership becomes out of reach for more people, the number of households experiencing housing insecurity is poised to grow.
Recent Policy Changes Have Made Things Worse
France’s slump in residential real estate began in the early 2020s and has only accelerated since 2022, driven by:
- Falling economic growth
- Job market uncertainty
- Eroding purchasing power
- Shifts in the European Central Bank’s (ECB) monetary policy
However, the real turning point came with the gradual implementation of stricter mortgage lending rules (HCSF recommendations), cutbacks to public supports such as the PTZ (Prêt à Taux Zéro), and the abolition of APL-accession in several zones. This combination pushed required personal contributions up by over 40% in just a few years, while house prices failed to drop enough to offset these new barriers.
In 2023, additional reductions in public support for homeownership compounded the credit crunch, and the long-anticipated drop in house prices has so far failed to bring relief.
No Rapid Recovery in Sight
The current French housing crisis is on a historic scale, with just 629,400 homebuyers in 2024 – a level not seen since the fallout of the subprime crisis. Back then, a government-led stimulus quickly revived the market. This time, no such intervention appears on the horizon, and there are no clear signs of improvement for first-time buyers as we approach 2025.
Meanwhile, existing homeowners looking to upgrade or move have been less affected, thanks to gains from resales. But first-time buyers – particularly those with lower incomes – remain largely shut out of the market.
Why First-Time Homeownership Matters
Homeownership is about more than property or investment; for many in France, it’s the main defense against precarious housing and financial instability. In many towns and rural areas, buying a home is the only reliable path to stable, affordable housing, given the chronic shortage of private rentals.
Without swift and targeted policy reforms lowering the entry barriers to first-time homeownership – especially for younger and lower-income households – France’s real estate sector risks staying in the doldrums, deepening inequality and slowing economic growth.
